U.S. Department of Labor Rules for Unpaid Interns

There are strict parameters set on internships by the Fair Labor Standards Act (FLSA). If a private-sector employer does not meet the six-part test established by the FLSA, interns must be paid minimum wage and overtime compensation for their services. Under the FLSA, the term “employ” is defined broadly. Thus, internships in the for-profit sector are usually considered compensable employment, but under certain circumstances, participating individuals need not be compensated.

Whether employers are eligible for this narrow exception is determined on a case-by-case basis. The Department of Labor has the following criteria for making this determination:

1. The internship, even though it includes the actual operation of the facilities of the employer, is similar to training given in an educational environment.
2. The internship experience is for the benefit of the intern.
3. The intern does not displace regular employees but works under the close supervision of existing staff.
4. The employer that provides the training derives no immediate advantage from the activities of the intern, and occasionally its operations may actually be impeded.
5. The intern is not necessarily entitled to a job at the conclusion of the internship.
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If these six factors are met, the wage and overtime requirements of an employment relationship under the FLSA are not triggered. The factors boil down to whether individuals are working for the benefit of their employer or to benefit themselves.

According to the Department of Labor, “the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience.” Another way to ensure that interns are training, rather than being employed, is to provide the interns with skills that can be used in a variety of work settings. Interns should not perform a company’s routine work and the company should not be dependent upon the work of the intern. If this is the case, the intern is likely displacing regular employees. Further, internships exempt from FLSA requirements may not be used as an extended job interview or “trial period.”

If you have questions about whether you have been fairly compensated, contact experienced New York employment law attorneys, call us at 800-807-2209 for a free consultation.